The 3-say cooling-off period: Myth and reality

In 2001, I bought some magazine subscriptions from a couple of college students who were selling them door-to-door. I'd had my own miserable experiences trying to sell things to strangers, so I had a policy of buying from any kid who wanted to sell me something.

I let the young man and young woman come into the house, and I listened to their pitch. I browsed through a glossy brochure that listed a bunch of magazines I didn't really want or need. In the end, I agreed to purchase two subscriptions.

But as I was filling out the forms, I began to have second thoughts. Things didn't feel right. Should a subscription to Entertainment Weekly really cost $50 a year?

“I'll be right back,” I said, and I went to my office to google for information about the company selling the magazines. This was during the early days of Google, and information was not quite yet ubiquitous. I wasn't able to find what I needed on short notice.

I bought the subscriptions. The young salespeople thanked me and went on their way.

Later that evening, I did some more research. I found that the prices I was paying for my magazines were nearly double the normal subscription rates. I also found that the company from which I had purchased them had a reputation for flakiness.

I felt like a fool. Fortunately, I had recourse because of the three-day cooling-off rule.

The 3-Day Cooling-Off Period

When you buy something from a store and later change your mind, your ability to return that item is governed by store policy. Some stores, such as Costco, have very liberal return policies — others do not.

But what if you buy a set of steak knives at the county fair? Or purchase an Entertainment book from a co-worker? Or pick up several magazine subscriptions from students selling them door-to-door? In these situations, there's no storefront for returns. But in many cases you still have three business days to cancel the transaction without penalty.

Under the U.S. Federal Trade Commission's cooling-off rule, you have the right to cancel a purchase of $25 or more for a full refund as long as certain conditions are met:

If you make a purchase entirely by mail or telephone, the rule does not apply.

When you initiate the sale at the seller's permanent business location, the rule does not apply, even if the deal is closed in your home.

In order to take advantage of this rule, you must return the item you bought in a condition similar to how you purchased it.

Despite popular misconception, there is no cooling-off rule for automobile purchases. Make sure you want that car before you buy it.

In order for the rule to apply, the purchase must be for personal, family, or household purposes.

This rule isn't applicable to purchases made to meet an emergency, such as a natural disaster or an home insect infestation. Nor does it apply to repairs and maintenance on your personal property.

There's no three-day cooling off period when you buy real estate, insurance, or securities (such as stocks or bonds). In other words, if you purchase insurance or stocks from a door-to-door salesman, this rule offers no protection.

You're also not protected if you buy an “arts and crafts” item at a fair, shopping mall, civic center, or school. For example, if you buy a holiday wreath at your child's grade school, there's no cooling-off period.

Be aware that in some instances you'll be asked to sign a document waiving your right to cancel. This document is perfectly legal, and if you sign it, this rule does not apply.

In many cases, the seller will give you cancellation forms when you make your purchase. But even if you don't receive the paperwork, you're still covered. If the seller did not provide cancellation forms, you can write your own cancellation letter. It must be post-marked within three business days of the sale. You do not have to give a reason for canceling your purchase. You have a right to change your mind.

Additional Resources

From my experience, businesses that are shady enough that you might need to use this rule (such as the magazine sales outfit from which I bought my subscriptions) can be unresponsive to your requests to cancel. To obtain satisfaction, I had to call upon the Better Business Bureau. The FTC offers some other suggestions:

If you have a complaint about sales practices that involve the Cooling-Off Rule, write: Consumer Response Center, Federal Trade Commission, Washington, DC 20580. The Rule's complete name and citation are: Rule Concerning Cooling-Off Period for Sales Made at Homes or at Certain Other Locations; 16 CFR Part 429.

You also may wish to contact a consumer protection office in your city, county, or state. Some state laws give you even more rights than the FTC's Cooling-Off Rule, and some local consumer offices can help you resolve your complaint.

In addition, if you paid for your purchase with a credit card and a billing dispute arises about the purchase (for example, if the merchandise shipped was not what you ordered), you can notify the credit card company that you want to dispute the purchase. Under the Fair Credit Billing Act, the credit card company must acknowledge your dispute in writing and conduct a reasonable investigation of your problem. You may withhold payment of the amount in dispute, until the dispute is resolved.

In 2001, after weeks of waiting, I finally received a refund on my magazine subscriptions. I also learned a valuable lesson. It's one thing to buy candy or from the neighbor kid who is raising money for band camp, but it's another to buy things from young adults I don't even know. This experience forced me to revise my “buy from kids” policy; now I only buy from children I know, or those who live in my neighborhood.

In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.

Remind me to send our kids to your house whenever they have a fundraiser… 🙂

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Eric J. Nisall

11 years ago

Very interesting info you have dug up JD. I have heard a little about the cooling-off period, but really had no idea what it entailed until now. It’s definitely a good thing to know if you are the type of person who finds it difficult to say no to people even though you do not really want to go through with the purchase.

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Andrew

11 years ago

With all the regulations for this rule, it seems like it only covers against door-to-door salesmen. Are there any other instances where it CAN be used?

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elisabeth

11 years ago

I tend to resent finding kids at my door who have been sent out to sell stuff to support their team or club. I don’t want bars of milk chocolate or boxes of overpriced candy. If I know the children, I’ll sometimes just give a dollar or two and say, “keep the chocolate yourself.” But it feels like some sort of child abuse when children are driven long distances to plead for money from people they don’t know and play on peoples sympathy…

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WiseMoneyMatters

11 years ago

Great article. I hadn’t realized that there was such a law, though it seems like with so many exceptions, the law rarely applies.

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sara l

11 years ago

Thanks for the info. Recently I had a kid selling newspaper subscriptions that would be applied to a college scholarship. I wasn’t sure about the company and didn’t want to give him credit card info, so I filled out everything but payment and told me to give me a number for his boss. I called the newspaper to verify the company (legit) then called the boss and gave him my credit card info.

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Rachel

11 years ago

JD, those “college students” trying to win a trip to Cancun or wherever are just rip off artists. Actually I am AMAZED that you got your money back! I filled out the order form one time at a mall with a young man who approached me because a) I knew how cruddy it was to sell stuff like that since I had done something similar once before, b) I had a $20 on me (there was no way I was giving this guy a card number or a check!, and c) I knew I wasn’t getting those mags, but when… Read more »

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KC

11 years ago

I just don’t answer my door anymore. Or I answer it by yelling through it. I’m in a very nice, but urban area and if a stranger knocks on my door it won’t get answered. We have too many problems with crime, panhandlers, and salesmen to answer the door. Sometimes I let my 80 lb Golden Retriever answer the door for me and that takes care of riff-raff.

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Cathy

11 years ago

Be careful, kids being used in scams is VERY popular due to this reason. I’m always a little put off by coworkers pressuring me to buy cookies and other stuff for their kids. On the other hand, I know some schools depend on bake and craft sales for part of their funding – mine did. When I was young and worked in the mall, I was approached by these two boys on my lunch break. The cornered me on a bench. One was very attractive and flirted with me. The other was talking about these awesome magazine subscriptions he and… Read more »

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Jason B

11 years ago

#7 I would have to say “you’re a sick person if you kick any dog. get off my porch!”

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Jerry Weaver

11 years ago

Andrew, you are right that the rule is designed to cover door-to-door sales. This is where the greatest danger is to getting high-pressured into buying something you don’t really need or want, just to get rid of the salesperson. My wife once arranged to have someone come to “test our water”. Of course what the so-called “tester” was there for was to sell us a $3,000 water purification system. When I asked the cost, she said “$50 a month”. I had to pry it out of her to get the length of time–5 years. I told her I don’t make… Read more »

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15 Minutes to Riches!

11 years ago

I had no idea this law existed. Thanks for the info! I wish I would have known this earlier. 🙂

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Free Your Mind

11 years ago

Yeah…, the most skilled salesman on the planet can’t hold a candle to a child at your door.

It started off innocent, but now (just like everything else) a lot of corrupt industries are taking advantage of this concept.

This info is golden!!

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PDXgirl

11 years ago

I got scammed by them once when I lived in the dorms. I sent in my cancellation but never got my money back. There was probably something else I could have done or somewhere I could have reported them, but I chalked it up to lesson learned and have never bought from magazine salesmen since.

I’m so surprised to learn that there isn’t a three day cooling off period for cars! I had always thought that there was, good thing I haven’t depended on it.

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Chris

11 years ago

Good move on trying to look up the company on Google before buying. I always do this when making internet orders as well. If I have never bought from a company before, I always look up reviews of the website to see what experiences other shoppers have had with them. I’ve saved myself many times from buying into scams by doing this, but it is probably because I search out the absolute lowest prices which are often advertised by terrible companies who are able to offer such low prices because of their low-cost and shady operation.

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Someone

11 years ago

I hate the way school fundraisers work. The school teams up with a sales company of dubious ethics. The kids go to an assembly where a sales person gives them a hard-core pitch to encourage them to sell (man, I hated those when I was a kid). The kids are pressured to go door to door and sell as much as possible. Then the company takes 95% of the profits, and gives 5% to the school. I’d much rather support students doing a car wash/ lemonade stand/ craft fair/ bake sale– anything that doesn’t involve an outside company that’s going… Read more »

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Cathy

11 years ago

There is not a cool off period for buying a car. However, each state has it’s own rules about ‘lemon laws’. In Washington State, it’s 3 days. So you have to find something fatally wrong with it in 3 days that wasn’t disclosed in the contract to return it under a lemon law. In other words, doesn’t happen very often.

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Erica

11 years ago

I once bought magazines from a door-to-door salesman, a young man claiming he was earning money for college. I paid $50 for a 2-year subscription. I got completely ripped off — I never received even one magazine. I tried to follow up with the company several times, to no avail. I’ll never, ever buy that way again.

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Cathy

11 years ago

In defense of the mean old grump that shoos kids off their porch, maybe they were taken in by a kid scam once and swore never to be fooled again. My mom once turned down (nicely) a little girl selling girl scout cookies door to door. The girl started crying. My mom felt really bad (no, she did not cave and buy the cookies). But now she just doesn’t open the door at all if it’s a girl scout, and she wouldn’t let me join the girl scouts when I was little because she didn’t want me to sell cookies… Read more »

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RenaissanceTrophyWife

11 years ago

That’s quite a lot of info– good to have on hand! I’ve never bought anything besides girl scout cookies from a door-to-door salesperson (kid?) but maybe that’s because I live in a more urban area where people typically aren’t home until late.

With big retail purchases, I typically do a ton of research beforehand and make sure there’s a good return policy– Costco is one of my favorites!

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Jason

11 years ago

Only once have I ever caved to this sort of thing… bought 40 monthly issues for like a buck an issue (which is pretty much standard price) over the phone to support some cause I don’t remember. I lucked out that it was a magazine that I liked and had just let my subscription lapse, and I actually got my subscription.

If I hadn’t immediately known that the price was right, I would never have bought from a live person. And I still felt kind of dirty caving to it even then.

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the weakonomist

11 years ago

I never knew about this! It isn’t something that applies to me, but I will pass this along to others. Thanks JD.

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Nickâ€™s Internet Marketing News

11 years ago

Thanks for the info!

Next time I am selling something I will come to your house for sure.

I think a buyer should always be careful. If it seems too good to be true or doesn’t feel right then wait a day or two.

If they tell you that the offer won’t be there in a day then walk away.

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La BellaDonna

11 years ago

I remember years ago a pair of young college- age kids were selling some kind of wonder-vacuum … thingy. They asked to come in, and they wanted to demonstrate all the implements the WV-thingy would replace. I stumped them with my carpet cleaner at the time, which I called a “broom”, and pointed out that the WV-thingy wouldn’t really save me money. I did give them each iced tea, though, and I brought the girl up to my sewing room and made her give me her skirt so I could mend the split in the seam for her. Sometimes it’s… Read more »

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Shara

11 years ago

I won’t pay a charity for anything I can buy cheaper elsewhere. That isn’t to say that I won’t give them money, but they haven’t “earned” anything. It’s charity even if I get a bag of M&Ms out of the deal. That also means I’m an easy mark for Girl Scout Cookies. Those chicks have a corner on the market and I buy every year. These posts talk about the annoyance of little kids knocking on the door. I also worry about the potential danger to kids. Your own neighbors are probably safe and you can escort your kids, but… Read more »

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Charlotte

11 years ago

I never buy from unsolicited salespeople. Not even kids, especially at home. The only exception is if I know the people and really interested in the item/s being sold (at a reasonable price, of course). At home, for safety, I do not open the door to strangers, even if they say they are neighbors. I used to – I had 2 bad experiences, one with a guy asking for donations but when I opened the door he looked like a really suspicious character. The other is Verizon – high-pressure sales and took to much of my free time. At the… Read more »

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Scott NJ DAD

11 years ago

I HAVE RUN FUNDRAISERS THAT INVOLVE SELLING

NO REPUTABLE FUND RAISING COMPANY WANTS YOU TO SEND YOUR KID DOOR TO DOOR TRYING TO MAKE SALES

IT IS INSANELY DANGEROUS FOR THE CHILD!!!!

ALL COMPANIES I DEALT WITH SPECIFICALLY SAID, ONLY GO TO HOMES OF PEOPLE THAT YOU KNOW, IF POSSIBLE CALL AHEAD

IF YOU BUY FROM A KID AT THE DOOR, YOU ARE ONLY ENCOURAGING THEM TO RISK THEIR LIVES

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Jill

11 years ago

I avoid this situation completely. Basically, we have two entrance doors to the house. One in the carport that we use and our friends know to use. People who do not know us come to the front door and knock. So when there is someone at hte front door, I just dont answer it. If they really knew us, then they would come to the other door and I will answer that one. 🙂 And I couldnt even open the front door if I wanted to because we use the narrow hall/entry for storage!

Useful info, I live in Canada. I’ll need to check if we have a similar law. Thanks for providing an alterate view on ways to saving money.

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Miss M

11 years ago

I knew people in college who would try to sell the magazines, I don’t think they realized they were participating in a scam. They really thought they’d get a trip for their efforts. I never bought from them, didn’t have any money. We regularly get the neighborhood kids selling candy, if we have money we’ll buy a piece or two. We know all of them though and know how much it sucks to have to fundraise. In high school I only ever sold to my friends, I never went door to door.

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Aman

11 years ago

good points, just wanted to mention that in Ontario, Canada – the cooling off period is actually 10days. Also, if a person takes advantage of this cooling off period, they are entitled to get a full refund within 15days.

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CJ2

11 years ago

My black lab is a lover but he knows a great trick, if I stick him between my calves and hold his colar he starts snarling. I move his head back and forth and he snarls louder–it looks like I’m doing my best to hold him back–salsemen don’t even stay on the porch more than 20 seconds. One ran down the driveway so fast my neighbor called to find out what I had said–I explained about my dog and he laughed and asked if I would come teach his dog that trick.

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Elena Rivkin Franz

11 years ago

If you’re refinancing your home, you actually do have a three-day cooling off period called a rescission period. You should receive two to four copies of a document providing you with instruction on how/when to do it properly. This doesn’t apply for a purchase money mortgage, just refinance.

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Sara

11 years ago

When I was in college, groups of students from other schools came to the campus all the time to sell magazines. They would ask people to “vote” for them so they could win a trip, but if you agreed to it, you would find out that by “vote” they meant “buy magazine subscriptions.” The first time I was approached (before I knew they were selling magazine subscriptions), this guy came up to me and started talking to me. He was really friendly and nice, and then he started his pitch. I said I don’t read magazines, and he asked if… Read more »

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Nicki

11 years ago

Wow … great information. Thanks!

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Joseph H

11 years ago

I spent one summer selling cars for a big dealership in Albuquerque, New Mexico and there is such a thing as a three day cooling off period, but it only applies to off site sales. Like at the mall. If you buy at the dealership, no cooling off.

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mbrogz3000

11 years ago

Wow, everything really is covered on this site! I don’t buy things out of impulse, but rather from research. Unfortunately, its very easy to give into the marketing when making consideration to buy something. Some times, enough is enough and you end up just buying the thing! Then once you get it, all the excitement that was built up simply is not there. I’ve experienced this numerous times, and its quite easy just to return what you bought and get your money back, when you ‘cool-off’ and realize its not something you really need. Sometimes, its getting caught up in… Read more »

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Andrew

11 years ago

@ Jerry Weaver, Thanks for the info! I’m glad I live far enough out of the city all I get is the occasional Jehovah Witness.

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Shaun Connell

11 years ago

Though it might be legal, I don’t think I’d feel comfortable going back on a deal after I already made the transaction. I think it might be best to tighten the belt, suck it up and learn the lesson.

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Brian

11 years ago

One correction though… In my home state of Massachusetts (unless it changed recently) there are statutes providing a three-day right to rescind for second mortgages, timeshares, health club contracts, and home improvement contracts.

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Nick

11 years ago

I had a similar situation, college kid trying to sell me magazines. Had a whole song and dance, his sales pitch was even written on an index card. In the end, he realized I wasn’t going for anything, so he instead asked for a bottle of water, and I obliged. Everyone won in the end, I was left alone, and he did not suffer from dehydration.

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Mike

11 years ago

Careful…these guys may not just be selling overpriced subscriptions. My stepfather got hooked by them and didn’t get any subscriptions. What he did get was his identity stolen–apparently they hit the whole neighborhood. My rule of thumb is if I don’t initiate the request for product information/purchase, I don’t buy it. Just don’t let people sell you, period and always google the hell out of the company before you buy. If I ever get hit by this scam I’d love to pull the kid over while I google the company and see what his reaction is.

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Alison

11 years ago

Many years ago, while at a mall, I encountered the magazine scam guys too. My friend and I signed up for magazines and then that warning bell went off. We ended up needing to get mall security to chase the guys down, give us our money back and tear up our paperwork. Then security kicked them out of the mall. I’m not joking about chasing them down. I still think about the cops and robbers foot chase whenever I’m in that section of the mall.

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Rahul

11 years ago

I wasn’t aware of this 3-day cooling-off period. As for me, the place where i stay is thousands of miles out of the country where this rule is in place and we don’t hear about things like this or even like consumer rights.

It’s unbelievable that this kind of thing is still going on in this country.

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Dana

11 years ago

The first thing I ask the kids or young adult is “are you selling something?” If they say “No, just my sparkling wit and personality.” Then I listen till they try to sell me the magazine and inform them that I have no intention of buying anything form someone whom I can not trust….ie: a liar.

The scary scam used to make me feel sorry for them and want to help….but I’ve learned that they don’t see enough to change their situation. I recommend that they seek help at “insert local place here”.

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Krys

10 years ago

According to the FTC link you provided you CAN cancel a purchase from someone you’ve invited to your home. The exact quote is…”The Cooling-Off Rule applies even when you invite the salesperson to make a presentation in your home.” Check it out.

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Hi! I’m J.D. Roth. I'm here to help you master your money — and your life.

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